Las Palmas property is in demand but the value is still there
Property prices in Las Palmas de Gran Canaria city rose by 6.01% in 2015, according to figures from Spanish property website Pisos.com.
The rise was the largest of any of Spain’s provincial capitals, outpacing even high-demand cities like Barcelona (up 5.95%) and Palma de Majorca (up 2.11%).
However, the average price of property in Gran Canaria’s capital stands at €1,492 per square metre; Lower than Barcelona at €2,027 and Palma de Majorca at €3,283.
This shows that while demand for Las Palmas property is rising the city is still good value, especially if you consider that the climate is good all year round; You can use your Las Palmas property for a warm-weather break all through the winter, and also rent it out throughout the year.
Why are Las Palmas property prices rising?
There are several reasons why both locals and non-residents are buying property in Las Palmas.
Recovery after the crisis
Prices fell a long way (up to 40%) during the crisis and Spain’s deep recession meant that few people were buying property. Tourism in Gran Canaria, the island’s main source of wealth, suffered as Europeans cut back on foreign holidays.
However, with several major markets, such as Britain, Germany and Scandinavia, now recovering tourism is booming in Gran Canaria. Las Palmas is also getting record numbers of winter cruise ship visitors nd its own tourist industry is booming as more people opt for a holiday in an authentic city rather than in a resort.
A safe destination
Events in competing destinations such as Tunisia and Egypt have pushed a lot of people to book their holidays in the safe Canary Islands. Gran Canaria is almost fully booked this winter and forward bookings for the rest of the year look good as well.
This is having a marked effect on Las Palmas property prices for two reasons.
- More visitors mean more non-residents deciding to buy property.
- The island economy is recovering from the effects of the crisis and locals are returning to the market.
Mortgage lending
Between 2008 and 2014 is was difficult to get a mortgage with a Spanish bank or foreign banks with Las Palmas branches. Most lent enthusiastically in the period up to 2008 and had to beef up their balance sheets and shed exposure to mortgage debt afterwards.
However, in the last year, the banks have started to lend to both locals and non-residents again. With EU interest rates at record lows, mortgage repayments are more than reasonable.
Short term rental income
It is now legal to rent private property in Las Palmas city on a short-term basis. This is driving demand for property in areas close to the beach, especially amongst non-resident buyers looking fo a holiday home that also yields an income.
Las Palmas was already amongst the Spanish cities with the highest rental ROI (at around 5% on average) but short-term rental income for the right property can be much higher even when you factor in extra costs such as cleaning and management.
Buying a Las Palmas property as a non-resident
While the purchase process is transparent and relatively straightforward, I’d advise anyone who isn’t familiar with the local property market and Spanish property law to use a bilingual estate agent working for a quality local agency.
Here’s why…
- Estate agency services are free to buyers in Las Palmas as the seller pays their fees.
- Quality agencies pool their properties in a shared property database so agents and can show you almost everything on the market.
- A bilingual agent can hep you with mortgage applications and communicate with owners (most of whom are local).
Non-resident mortgages
Non-residents from EU and EEA countries can apply for non-resident mortgages without any problem, although levels of service and speed vary considerably between banks. Bear in mind that most banks still require a 30% deposit and you need a further 10% for local property purchase taxes and fees (notary, property registry, etc).
Prices in high-demand areas
While average prices in the city are still under €1500 per metre, most areas that attract non-resident buyers are more expensive. Prices in the port area close to Las Canteras beach are close to €2,000 per square metre and beachfront property starts at €3,500 per metre. There are still plenty of bargains in the area although they are selling fast.
Prices in the port area close to Las Canteras beach are close to €2,000 per square metre and beachfront property starts at €3,500 per metre. There are still plenty of bargains in the area although they are selling fast.
For more information about buying a property in Las Palmas, feel free to contact me for a no-obligation chat; Or follow LPP on Facebook for the latest news and property.